Investing in cryptocurrency requires that you calculate taxes. While this may seem complex, there are tools that can assist with this task – specifically, crypto tax software packages which automate record keeping and generate tax forms while offering 24-hour support services.
Koinly is a beginner-friendly platform, connecting exchanges, wallets and DeFi protocols seamlessly. Offering numerous features at cost-effective rates compared to competitors.
Crypto tax software allows you to calculate your capital gains or losses from trading, mining and other activities like betting and investing. It also assists with filing taxes in accordance with local laws. Some apps allow users to pool assets together to increase profitability; this can reduce tax liabilities while also decreasing risks by narrowing the gap between your gains and losses.
The best crypto tax software should be user-friendly and support multiple exchanges, wallets and decentralized finance (DeFi) platforms. Ideally it would support all major cryptos as well as transactions such as staking, mining and lending; furthermore it should feature data import and reconciliation features within just a few clicks; it should also have a good customer support team available should any questions arise; lastly it should be available in your country such as Coinpanda which supports over 100 exchanges and 300 wallets as well as supporting an array of cryptos as NFTs while offering beginners a free plan plan to start off their journey in terms of getting started on crypto tax matters.
An effective crypto tax software will make calculating taxes fast and effortless, helping to ensure compliance with new tax laws while preventing costly mistakes. Furthermore, having your crypto-related income accurately reported provides peace of mind.
Most of these tools allow you to import transaction data from exchanges, wallets and DEXs for automated ease. They will also fill out all required IRS forms automatically as well as offer strategies to save you money – such as pooling similar assets to offset losses.
Some crypto tax tools are free while others require a subscription fee. Subscription-based tools allow users to track transactions from over 500 crypto exchanges and wallets simultaneously while providing historical records for tax loss harvesting purposes. Popular options include CoinTracker, ZenLedger and TaxBit which is supported by PayPal Ventures as well as other prominent investors.
If you have invested in crypto via trading, NFTs, mining, staking or lending, filing tax returns may be a requirement. When filing returns it’s essential that using tax software that keeps up with changing regulations as well as your local tax structure; ideally this software would automatically import transaction data from exchange accounts or wallets and then calculate gains and losses using various factors.
An effective crypto tax tool should offer downloadable paperwork, such as IRS Form 8949. This will save time and ensure compliance with complex crypto tax rules.
Many crypto tax tools offer free tiers for users with few transactions, while Koinly and Accointing offer subscription-based models which make filing tax returns simpler and less stressful than ever. Furthermore, their customer support teams can assist in answering any inquiries related to your crypto investments.
Easy to use
Koinly is one such tool that makes understanding cryptocurrency gains and losses simple, providing a 360-degree perspective and offering user-friendly graphs to assist them with tracking their portfolios.
The IRS mandates that crypto traders and investors report capital gains using forms like Form 8949. Most crypto tax software programs keep records of transactions and calculate your tax liability; then at year’s end they provide you with IRS forms to fill out. Some services also enable money savings through services like tax loss harvesting.
Some cryptocurrency tax software is compatible with TurboTax, enabling you to upload reports and pay taxes online. Other programs provide more advanced features, including support for leveraged trading, DeFi staking and yield farming as well as integrations with hardware wallets like Trezor. Accointing is one such program which integrates multiple exchanges and wallets for data import while offering US-specific reporting as well as free plans covering up to 25 transactions – something TurboTax cannot.